Political and Legal Differences

Junior (College 3rd year) ・Business ・APA ・4 Sources

Doing business globally presents several difficulties due to the diversity of political and legal systems. Depending on their shared beliefs, one country's operations are different from those of another. All investors are obliged to abide by the established standards because the laws of the land provide guidance for commercial ventures. A nation's ability to maintain peace is also influenced by its political climate. The trading activities are impacted by the various political and legal systems (Abramson, 1994). It could be challenging for a businessperson unfamiliar with local regulations to find their way around a new market. Notably, different nations have varied laws guiding trading activities. A new entrant in the market can find it hard to secure market if he or she fails to understand the way of doing things in a new country. There are also some countries which have very strong influence from the political class. These politicians control what is to be disposed in the market and if one is not aware, he might end up closing the business. For example, when Coca-Cola was entering the Italian market, they printed the ingredients on tops. The Italian regulations required the ingredient to be printed on the bottles. An organization can overcome this by contracting an experienced lawyer in the commercial market(Bender,2008). Evaluating how differences in political and legal systems create vast misunderstandings and tremendous opportunities in the international marketplace is the best ways of securing market. Alternatively, consulting domestic business people can help in gaining awareness of how things are done. 

Globalization and Risk

Globalization is a trend which is taking the better part of the organization’s strategy. This has arisen as a result of realization of possible market ventures in other nations (Gourvish, 2006). Businesses are opting to diversify their resources by spreading their services to other places. This has been made possible by the availability of current technology, which has eased marketing of products. Concentration on one segment of the market is a big risk for any business. The current problems of inflation in various nations and economic regression is one of the factors which is fueling this trend. If a business is well spread in various nations, the possibility of it failing is so low. The market covered is wide enough to guarantee continuous profit making. However, some challenges are experienced in managing the vast entity. The management of the new opening is entirely conducted as separate entities (Hughes& O’Neil, 2008). This is essential in the sense that the loss made by one does not affect the others. Moreover, the closure of one business does not significantly prevent the growth of the rest. Globalization has also an effect of enhancing specialization on a certain line of business. Depending on the culture of the country, the investor can choose to offer certain services which are unique. This gives the business a better chance to thrive in the market.

Enhancing Competitiveness

An organization's ability to stay competitive ahead of the others requires persistence and understanding the needs of its customers. Before entering a new market, a well-informed research is conducted to identify the possible gaps in the market. One of the elements considered is efficiency of services. The investors conduct analysis of the available businesses to ascertain their ability to satisfy the customers(Abramson,1994). Depending on the findings, they are able to come with a unique strategy, which is able to counter their rivals. Additionally, market responsiveness are also considered. This is the ability of the business to fill the gaps which exist in the market. A responsible organization would tailor their services to fit with what is required in the market. In the same line, an organization can introduce new technology in areas where technological advancement could have been lowered. All these are means to remain unique and differentiate from other competitors. The customers would love to be associated with a business which is keen to value their needs first.

Enhancing competitiveness

The future of an organization is totally dependent on the type of decisions which is arrived at by the management. If a wrong strategy is chosen, it results to destructive direction which can lead to closure of the business. The progress which is normally witnessed in developing organizations starts from the mindset. The ideas of the team, which strategizes the order of things plays a vital role in enhancing order in the places of work (Bender, 2008). The current business world has shifted from knowledge seeking to conceptual system where things have to be actualized. It involves solving complex issues instead of analysis of the challenges without giving proper ways to handle the same. Reactive business strategies are defined as approaches which are taken after the triggers affects the organizations. They are normally developed to solve a problem which has already happened and therefore considered past. They have also a characteristic of regular analysis to evaluate the possible cause of the problem. Proactive strategies are taken due to possible threats. They are therefore future oriented and indicators are used to speculate the possible happening if the scenario continues (Abramson, 1994). One of the reactive strategy is increased promotion and marketing due to the decline of sales. This result after the company realizes fewer sales or the competitors are taking the market. For well thought approach, the management is supposed to come up with a long term solution to end the crisis. For example, collecting the views from the customers to ascertain the major problem. This would assist them to predict their existence in the market for the following years instead of relying on promotional methods. Designing products according to the needs of the customer is a great milestone in targeting future market.

Transforming Thinking

Coca-Cola is one of the company which has taken the lead in the beverages industry. Its global recognition has outdone others which tries to enter the market. Various factors have affected its expansion in other countries away from the mother country. One of it is macroeconomics. Taking united State and Kenya as base countries of analysis, this factor has variance, which affects the sales. The productivity in Kenya is low compared to the United State. This arises due to advanced technology in the U.S as opposed to Kenya (Hughes & O’Neil,2008). Additionally, interest rates for banks Kenya is seen to be high than in U.S, which limits the loan accessed for the development. Second, the political environment is a threat to the growth of the company. Tension which is experienced in the country makes it difficult to predict the future of the business. This is different from United State, where politics are done in a more civilized manner and does not result to destruction of properties. Moreover, culture is another factor which has great influence in expansion. Most of the people in the United State do not believe in consumption of sugary beverages due to health hazards associated with them. It makes it difficult to conduct campaign for its use(Abramson,1994). Kenya is a viable market for Coca-Cola products, since the citizens are less informed about its side effects. There is high possibility of market expansion in Kenya than U.S. Additionally, united State has staunch regulations on consumer products and a lot of checks have to be done before approval of any investment. In most instances, the investors are turned down. Kenya is a developing nation which appreciate developmental projects without much sanctions. Finally, both countries are not affected negatively by consumption of Coca-Cola product. It does not kill the social aspect of human being. These factors have exponential relationship in management of the company since they touch the real performance of the business.


This is the general composition of an organization and its way of actualizing activities. A business operating in one particular country is totally different from the one which has international outlet. This starts from marketing the products. An organization operating in one country has little to do in marketing since the market is localized(Gourvish,2006). Once the customers are familiarized with the product, continuous marketing might not be required any more. This is contrary to the one operating in multiple countries, which require well-structured and organized marketing. The management is tasked with the role of organizing for a good procedures to make customers in other countries aware of their products. In line with this, multiple business requires heavy investment in terms of technology. Dissemination of information among the chain of business would call for a good investment in IT infrastructure. Such is also applicable in production to tailor good in respect to the needs of diverse customers. The needs differ depending with the country and therefore differentiation is required across the countries. A business operating only in one country requires to understand its customers and continue to produce the same product in their lifetime. An organization with a wide coverage requires more employees and different managerial system to serve all channels.


External additions into the business in terms of services or products are termed as outsourcing. This is a common trend in the current organization. Some of the businesses do so to maintain the quality of the product or services (Gourvish, 2006). Before settling on decision of outsourcing, it is necessary to consider a number of factors which are pertinent. One is cost. Costs incurred by the business constitute a larger portion in determining the profit margin realized at the end of trading period. Before seeking to settle for external services, the management is required to weigh between developing the internal services and injecting new one. This should be considered in a more thoughtful manner to mitigate chances of making wrong decision. The second element of consideration is the size of business. Large organizations tend to suffer from workload during certain periods. Such a situation can necessitate hiring external services on contractual basis (Benderm2008). Small business are not overstretched thus adding extra services from outside might affect its performance negatively. The demand available could also fuel the services or products needed in a business. The higher the demand, the more the sales. This trickles down to the service provider and might call for outsourcing.

Globally Right Source

Operations of the business in the global perspective requires a wider view of issues. What single business operates differs from a multiple business, which has several outlets. Considering this fact, it is arguable that running a global business needs global source (Abramson, 1994). This is whereby an organization looks for all quality services from different places. They consider employing the right professionals in the line of business to prevent errors which comes along with lack of skills. It is important to consider the location of the business to enable the investor on the best way to look for services. This has an implication of assisting in estimating geographic location to look for services. Notably, the type of product contributes to global sourcing. If the products are not used in other countries, internal sourcing could save the business much. For example, if the locals have no expertise in the manufacture of a certain product, the organization can incorporate experts from other countries to teach the local employees (Gourvish,2006). The Market structure is core in choosing the right source.  The management is required to understand the market segment they operate on. This has an effect of enabling the right selection. The decisions made in the organization affects the overall performance in the market.


Abramson, N. R., Ai, J. X., & Canada. (1994). Key factors affecting the performance of Canadian firms doing business in the People's Republic of China: A summary report to Industry Canada. Ottawa: Industry Canada.  

Bender, S., (2008). The analysis of firms and employees: Quantitative and qualitative approaches. Chicago: University of Chicago Press.  

Gourvish, T. (2006). What Can Business History Tell Us About Business Performance? Competition & Change, 10(4), 375-392. 

Hughes, O. E., & O’Neill, D. (2008). Business, Government and Globalization. Business, Government and Globalization, 1-18.

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